PowerPoint Presentation

TRANSFORMING FEDERAL FINANCIAL MANAGEMENT

Financial Management Self-Assessment Tool for Agencies

Page 2

Financial Management Self-Assessment Tool

AREAS

Practices that

are deficient and

inhibit day-to-

day operations

Practices that

support day-to-

day operations

but rely on

inefficient

manual

procedures and

workarounds

Practices that

support

operations

under routine

conditions, but

are often

strained by

changing

circumstances

Practices that are

robust and

supported by

continuous

process

improvemen

Practices that

set the bar,

anticipating

challenges and

proactively

creating

solutions

1: Inadequate

2: Basic

3: Capable

4: Effective

5: Leading

Maturity Levels

Stage 1: Core Budget and

Accounting Operations

Stage 2: Financial and

Regulatory Controls

Stage 3: Data Management

and Analytics

Stage 4: Communicating

Results

Stage 5: Strategic Planning and

Mission Support

Focus areas

align with

Treasury FM

Vision

The Goal: To ensure Federal

financial management is

achieving the maximum

benefit for the American

people

The Financial Management Self-

Assessment Tool is a business tool that

helps a Chief Financial Officer (CFO)

self-assess his or her organization’s

level of financial management

discipline, effectiveness, and

efficiency.

It can validate a CFO’s view of his or

her agency’s maturity against a

standard framework, and show areas

where there is opportunity to

improve.

The FM Self-Assessment Tool is

designed to be used internally, is easy

to perform, and is based on current

conditions and existing documentation

common to every agency.

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FM Self-Assessment Tool Structure

DRAFT

Inadequate Basic Capable Effective Leading

Stage 1: Core Budget and

Accounting Operations

Legacy, customized system with

manual processes

Limited Automation, OMB-

approved modernization plan in

place

Modern system, no FISMA findings,

mix of manual and automated

processes

Automated end-to-end processes,

mix of batch and system-to-system

interfaces

Realtime system-to-system

interfaces, fully automated

processes

Stage 2: Financial and

Regulatory Controls

Modified opinion (Disclaimer or

Adverse)

Modified opinion (Qualified), ad hoc

risk management

Unmodified opinion with risks

identified and managed across the

agency

No material weaknesses or

significant deficiencies; enterprise

risk program in place

Sustained (three years) unmodified

opinion, proactive risk management

culture and program

Stage 3: Data Management

and Analytics

Standard reports, data unreliable

Standard reports, periodic data

reconciliation and validation

Standard and ad hoc reporting with

high quality data

User-driven reporting, integrated

financial and program data

Advanced analytics capability with

integrated agency-wide data

Stage 4: Communicating

Results

Ad hoc communications, Reporting

non-compliant

Results communcations limited to

within organizational silos, reporting

may not be compliant

Results communicated to agency

personnel, Reporting Compliant

Results communicated to agency

personnel and customers, reporting

compliant

Regular communications to agency

personnel and customers, reporting

compliant

Stage 5: Strategic Planning

and Mission Support

Ad hoc Planning Limited Planning and Analysis Meeting Some Targets

Most targets met, detailed program

analysis available

Year over year performance

improvements, results drive

decisions

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Inadequate Basic Capable Effective Leading

Stage 1: Core Budget and

Accounting Operations

Legacy, customized system; lack of

automated interfaces requiring manual

re-entry; no plans to modernize; FISMA

financial findings exist

Heavy reliance on manual processes that

lead to rework; no customer service

Legacy, customized system; limited

automated interfaces; OMB-approved

modernization plan; FISMA financial

findings exist

Reliance on manual processes with

efforts underway to automate; limited

customer service

Modern COTS product with limited

customizations; batch interfaces; no

FISMA financial findings

Mix of manual and automated

processes; established customer service

processes

Modern COTS product with no

customization; mix of batch and real-

time system-to-system interfaces; no

FISMA financial findings; strategic use of

third party arrangements

Automated end-to-end processes with

predominantly real-time interfaces; self-

service capabilities

Modern COTS product with no

customization; real-time system-to-

system interfaces; no FISMA financial

findings exist

Fully automated, real-time end-to-end

processes; self-

service capabilities widely

adopted

Stage 2: Financial and Regulatory

Controls

Modified opinion (Disclaimer or Adverse)

Risks occasionally discussed; no formal

process to manage risks; periodic

mission failure due to lack of

preparedness

Modified opinion (Qualified);

noncompliant with one of more laws and

regulations

Risks identified and managed in a siloed

manner; ad hoc process to identify and

document risks; major risks averted in a

reactive, inefficient manner

Unmodified opinion with one or more

material weaknesses; noncompliant with

one or more laws and regulations;

Risks identified and managed across the

agency; management understands cross-

cutting agency risks; established

mitigating controls minimize risk

exposure

Unmodified opinion no material

weaknesses or significant deficiencies;

compliant with laws and regulations;

Formal ERM program to identify,

document and manage risks across the

agency; mission programs inherently

manage risk; risk mitigation enhanced

through diagnosis of lessons learned

Sustained (three years) unmodified

opinion; no material weaknesses or

significant deficiencies; compliant with

laws and regulations

Mature ERM program to identify,

document and manage risks across the

agency and with external stakeholders;

culture of proactive risk management;

agency routinely implements preventive

controls and risks rarely become issues

Stage 3: Data Management and

Analytics

Standard financial reports; data is

unreliable

Standard financial reports with limited

ad-hoc capability; data reconciled and

validated periodically

Standard, ad-hoc reporting capabilities

for financial data; high quality data

reconciled and validated regularly

Standard, ad-hoc, user-driven reporting

capabilities; integrated financial and

program data

Standard, ad-hoc, user-driven, analytic

reporting capabilities; agency-wide

access to integrated financial and

program data; ability to perform

advanced analytics (ex. predictive,

evidence based decision-making, etc.)

Stage 4: Communicating Results

No structured internal communication

function

Does not meet financial reporting

deadlines

Organizational goals and performance

metrics communicated to FM personnel

May not meet financial reporting

deadlines

Organizational performance

communicated to agency personnel

Meets reporting deadlines

Organizational performance

communicated to agency personnel and

customers

Meets financial reporting deadlines

Organizational performance

communicated to agency personnel and

customers on a regular basis

Meets financial reporting deadlines

Stage 5: Strategic Planning and

Mission Support

No documented FM goals or

performance metrics

Unable to produce cost of agency

programs

FM goals and performance metrics

documented; no performance targets

exist

Produces macro level cost of agency

programs with no insight on cost detail

FM goals and performance metrics

documented; performance targets exist;

some performance targets met

Produces detailed annual cost of agency

programs and understands cost drivers

FM goals and performance metrics

documented; performance targets exist;

most performance targets met

Regularly produces detailed cost of

agency programs and leverages internal

benchmarking

FM goals and performance metrics

demonstrate year-over-year

improvement; performance targets

updated annually

Detailed cost estimating, forecasting,

and external benchmarking drive

program decisions

FM Self-Assessment - Additional Detail

Page 5

Directions

Directions: Use the worksheet to get a quick view of your agency’s financial

management maturity.

1. Familiarize yourself with areas and levels on page 2.

2. Review the Federal Financial Self-Assessment Tool on pages 3 and 4, and note

the levels of maturity within each component. Page 4 provides additional detail

into the FM Self-Assessment Tool structure on page 3.

3. Rank each component in your organization on a scale of 1: Inadequate to 5:

Leading.

4. Use results to begin discussions surrounding areas for improvement.